CHAPTER- VII

DRUG ADTVERTISMENT AND LAW

The dictionary defines the word ‘advert’ as “to draw attention to, to refer

to,” and this is exactly what advertising did mean originally. The Drugs and

Magic Remedies (Objectionable Advertisements) Act 1954 defines advertisement

as “any notice, circular, label, wrapper, or other document, and any

announcement made orally or by any means of producing or transmitting light,

sound or smoke.”1 The definition is only inclusive and not exhaustive. It is

intended to make known to the public through any of the media of something for

promoting sale. In the Commercial advertising is the business which concerns

itself with making lmown to the public of what is for sale and encouraging them

to buy by any means of communication which the seller deems to be effective.

The need to regulate commercial advertisemtns in general and

pharmaceutical advertisements in particular is necessary to prevent exploitation of

consumers by misleading informations. The various legal provisions dealing

with drug advertisement, its background and constitutionality are analysed here.

The cases decided under these provisions are examined to see how far these

provisions are effective in protecting the interest of pharmaceutical consumer.

' Drugs and Magic Remedies (Objectionable Advcrtiscmentstl Act I954, S.2(a)

223

The legal provisions dealing with pharmaceutical advertisement are spread

over many legislation and rules framed under these legislation. The main

legislation dealing with pharmaceutical advertisements is the Drugs and Magic

Remedies (Obligationable Advertisements) Act 1954 and Rules framed under it.

Since ‘advertisement’, by definition, also includes ‘labelling’, the study of the

provisions in the Drugs and Cosmetics Rules dealing with the information to be

fmnished through ‘labelling’ may also become relevant here. In addition to these

provisions the Monopolies and Restrictive Trade Practices (MRTP) Act 1969 and

the Consumer Protection Act 1986 regulate advertisements in general.

It may be appropriate at the outset to deal with some of the aspects of

advertisements and the importance of advertisement in general from the point of

view of both manufacturer and as well as consumer.

Importance of commercial advertising

Vlfhen almanufacturer wants to sell a product, he has to reach out, and

establish contact with the mass market. The best way of reaching these potential

buyers is through mass communication by way of advertising. Advertising is a

forceful communication which promotes the sale of goods, services through use of

information and production. It is perhaps the best known mass communication

charmel. Marketers and firms engaged in selling their products throughout the

world are fully aware of the necessity and importance of advertising.

224

Advertising is important because it is supposed to provide the consumer

with facts he needs to make an intelligent choice. In a market flooded with a

variety of brands, he can differentiate and compare the features of various

products, and can know their plus and minus points. He can differentiate between

competing brands in the matter of price and other advantages and disadvantages.

He can also save his time. In this context, advertising is supposed to help in

creating a competetive environment which promotes better quality and fair

pricing.

From the point of view of the manufacturer or marketer, the equation is

simple. The aim of any business is survival and growth. In order to survive, one

has to sell. In order to sell, he has to advertise. Even the Supreme Court

appeared to have recognised the importance of the advertisements when it

observed that “low prices to consumers are dependent on mass production, mass1

production is dependent on volurnesales and volume sales are dependent on

advertisement.” The Court viewed it as a life blood of free media.

Some aberrations in advertisement

Unfortunately, with the growth in the number of goods and services

available to society, advertising has become an instrument to draw our attention

away from the product and focus our attention on factors that in no way benefit

its utility. For example, in promoting the sale of a particular brand of a washing

2 T/1 TA Press Ltd. v. Mahanagar Telephone Nigam Ltd, A.I.R. 1995 s.c.243s at p.2447.

225

soap or detergent, the advertiser draws the consumers’ attention to ‘free with the

package’ soap tray or brush or even a plastic pail. The buyer’s attention is drawn

away from the actual commodity and its quality and is focused on the ‘free’

article supplied with the product to the extent that the buyer considers it a good

‘buy’ if he can obtain the pail together with the soap. In other words, the main

consideration in such a purchase is not the efficiency of the soap. Such an

advertisement, therefore, does not ‘advert’ but ‘diverts’ the attention of the buyer.

In the present day business scenario, where a consumer is supposed to be the

‘king’, the businessmen by means of glossy and hypertech advertisements

swarmed all segments of consumerism to leave an enchanting impact on

the’kings’ and have also devastated to some extent the principle of ‘free and fair

business practices’. Advertisements today instead of being an expression of

‘creative means of the need’ are simply ‘creating the need’ for buying a product.

The lure of a glossy advertisement depicting a facourite film star or sports star

promoting a product is too tempting to avoid. Unfortunately the present day

Indian consumer is far more illiterate and ignorant of realities and surroundings.

He is easily given to hype and is fascinated by hypertech depictions.

Advertising had its beginning as a means of communication between a

seller and buyer. It is supposed to be factual and informative, honest in content

and clear in presentation. The explosion of the commodity market introduced not

only innumerable items of daily use and consumption but many manufacturers of

226

the same commodities which in turn resulted in keen competition for sales and

gave birth to the phenomenon known as ‘high pressure’ sales advertising. The

implication of advertising can only be appreciated when we consider that the

advertising business has grown into a leviathan today with an annual turnover into

hundreds of crores of rupees.3 The common man can not condone this enormous

growth especially when he knows that this astronomical increase is at his

expense because it is he who pays for all advertising. Further, this phenomenal

rise in advertising business has occurred during a decade when the National

Growth Rate had gone down and the purchasing value for the rupee has

plmmneted to an all times low.4 It is obvious, in these circumstances, that

advertising today is both wasteful and contrary to the interests of the national

economy.

Advertising has lost its educative value. The advertising process itself

makes little or no pretence of being educational or unbiased. The consumer

education by definition has the welfare of the consumer as its ultimate goal,

where as the main purpose of advertising is to stimulate in consumers a desire to

buy a certain product or patronise a particular business. Such an action may or

may not be in the interest of the consumers who come into contact with the

advertisement. The seller controls the content and emphasis of advertisements

3 Jojie Mandana, The Indian Marker Place W.Q. Press, Bangalore, (I977), at p. 53.

4 Ibid.

227

a.nd the interest of the seller are naturally primary. It compels people to buy

things which they do not need. It multiplies our needs by playing upon our

sentiments and weaknesses and makes us spend beyond our means. It also raises

the prices of goods. Advertiser spends huge amounts to promote sales, and pass

on the expense to the consumers who pay through the nose of products which

have absorbed the cost of advertising. Then again we have the tall and

unbelievable claims of manufacturers. It is not possible to become as beautiful as

an actress by use of a particular beauty cream. Psychological and emotive appeals

are also cleverly used to mislead the public. Sometimes a false claim for a

product is made. It is advertised as “the largest selling” brand when, infact, it

barely manges one to two percent of the total sales of the product. It can also be

vulgar. The body of woman is exploited to promote products. But what is

disturbing is that it tends to develop monopolies. Advertising creates a brand

image and puts the product in a class by itself. This brand image is like a

protective wall around the products which it is difficult for other brands who are

new to the market to compete with. Thus advertisement gives tremendous

coverage to established market leaders and enables them to monopolise the

market. These are some of the disadvantages crept into the advertising. While

the informational needs of consumers may at times correlate with the goals of the

seller, the consumer’s needs are only incidental to the advertising business.

Need to regulate advertising

228

Advertising remains as a vital source of information. It is hard to imagine

any business functioning effectively if one were deprived of commercial

advertising. The total prohibition of advertising would not solve current

information deficiencies. Major alternative sources of information from

government or private consumer groups are not now available substitute. Product

testing magazines reach relatively few people. Alternative information sources

like television and news papers provide relatively little information.

The current information system, with commercial advertising playing a

central role, is likely to remain. On one side advertising has been justified as a

boon to consumerss and on the other it has been criticised as a deterrent to the

free market which is considered ideal to the consumer sovereignty based on

rational choices.6 Whichever description is closest to the truth, the practical

impact of the role of advertising on consumers is to leave them with little control

over a major information source on which they base many consumer decisions.

Therefore, the major concern to consumers are the reliability and accuracy

of advertising content. Although advertising in its current form does not provide

full information, can consumers be protected from inaccurate and deceptive

appeals‘? What regulatory mechanisms are most appropriate to this goal?

American Advertising Federation, Questions and Answers About Advertising, (Washington. D.C.

1974). Brochure.

5

6 Zena Cook, Allen R. Ferguson and Garth Trenkl, Impact of Advertising." Implications]/or (bnsumcr

Education, Washington, D.C.: U.S. Oflice of Consumers’ Education, pp. 2iT.

229

In many countries of the world, advertising has been restricted in many

forms either by con-sent of Advertisers’ Associations or in some cases by

government authority. It is significant that in Britain they have what is known as

the Advertising Standards Authority.7 The function of this body is to infuse ethics

into advertising and to ensure that all advertisements are legal, decent, honest and

truthful.8 In India, guidelines have been provided for advertisers, agencies and

media owners. The Advertising Agencies Association of India has laid down a

code of ‘Standard Practices’ which seeks to protect the interest of the public and

to discourage advertising that may impair public confidence.9 To this end, it lays

down that advertising should conform not only to the laws but also to the normal

and aesthetic sentiments of the general public. It should not exploit superstition

and credulity and should avoid distortion and exaggeration. The Indian Society

of Advertisers and Indian and Eastern Newspapers Society also seek to prevent

advertising that is untruthful and misleadingw They rule that advertising should

not mislead public with false statements with regard to the character and prices of

the merchandise with personal recommendations and testimonials which are

untrue and fictitious, or by creating misgivings in the mind of the public about the

trustworthiness of competitive products. Advertising is not supposed to create

7 See O’ Keefe, The Law Relating to Trade Descriptions, Vol. 2, Butterworths. (I988), pp.5/54 - 5/80.

8 See generally, international chambers of Commerce, International Code oj'Adverti.w'ng Practice. (193 7)

9 Supra n.3 at p. 54.

‘° rm.

230

confusion in the public mind between the products of one manufacturer and

another. Indecent, vulgar, suggestive of offensive themes or treatments should be

avoided. In addition to these guidelines of professional bodies, there are also

other voluntary self regulating bodies like Professional Advertisement Council

and Council for Fair Business Practices. But all these bodies appears to be

existing for name sake and as perfect paper tigers‘ I.

Advertisements containging health claims made for medicinal products

In recent years there has been a great increase in the number of

objectionable advertisements published in newspapers and magazines relating to

alleged cures for various diseases.” These advertisements tend to cause the

ignorant and unwary to resort to self-medication with harmful drugs and

appliances or to resort to quacks who indulge in such treatments which cause

harm. The Drugs and Magic Remedies (Objectionalble Advertisements) Act 1954

has been enacted and rules were framed” under it to control the advertisement of

drugs in certain cases, to prohibit the advertisement of remedies alleged to posses

magic qualities.“ It is clear from the preamble that the purpose of the Act is to

H See Amit K. Vyas, “Misleading Advertisements are lnjurious to Public Interest : An Overview of

Related MRTP Provisions”, (1993) Chartered Secretary, A77.305 (April).

12 See Indian Express, January 27, 1990.

'3 Drugs and Magic Remedies (Objectionable Advertisements) Rules. 1955.

'4 See supra n. l, Preamble.

231

prevent objectionable and unethical advertisements in order to discourage self­

medication and self treatment.

lt may be appropriate to study in brief the background of this legislation,

the surrounding circumstances and conditions under which the legislation was

enacted and the mischief which it intended to suppress. This may also enable us

to examine the issues of constitutionality of these provisions and the right of

cormnercial advertisement as part of freedom of speech guaranteed under Article

19(1) of the Constitution.

The context which warranted the legislation of the kind that was enacted in

1954 was made clear from the report of the Chopra Committels. Committee

noticed the ingenious propaganda, clever and attractive dissemination of the

supposed virtues and wide and alluring advertisements of patent and proprietary

medicines. The Committee realised the credulity and gullibility of the masses,

especially when certain cures are assured in utterly hopeless cases and the

probable impact on patients who have tried treatment by medical men without

success. Such patients resort to any and every drug that comes in their way.

Widest publicity is given to these and the preparations became invested with

miraculous virtues. The re-assurances of cure, the force of argument advanced to

guarantee it and certificates of persons said to have been cured which are all set

I5In August 1930, the Government of India appointed the Drugs Enquiry Committee with Sir. RN.

Chopra as its Chairman to enquire into the extent of controls on drugs. Report is quoted here from

Hamdard Dawakhana v Union of India, A.I.R. 1960 S.C. 554 at p. 560.

232

out in advertisemtns make a deep impression, especially on those with weak

nerves. The report pointed out that “the love of mystery and secrecy inherent in

human nature, the natural disinclination and shyness to disclose details of one’s

illness especially those involving moral turpitude, the peculiar temperament of the

people who, high or low, rich or poor, demand ‘something in a bottle’ for the

treatment of every ailment and poverty of the people who cannot afford to pay the

doctor’s bills or the high prices current for dispensed medicines, have all been

enlarged upon as tending to self diagnosis and self medication by patent or

proprietary medicine.”'6

This was considered to be very apt comment on the existing situation and

mischief which needed to be curbed. Therefore, the evil of self-medication and

consequences of unethical advertisements relating to medicine are the targets of

the legislation.

Constitutionality of the provisions of the Act

The Act was challenged in Hamdard Dawakhana v. Union of India”, on

the ground that it is an infringement of the right to free speech under Article l9( 1)

(a) and the right carry on trade and business under Article 19(1) (f) and (g).

Objection was also taken under Articles 14, 21 and 31. In this case the Drug

Controller stopped the sale of forty of the petetioner’s products. An objection

‘° /ma.

" A.I.R. 1960 s.c. 554.

233

was taken to the advertisements in regard to drugs. In the counter affidavit, the

respondents justified the necessity of the Act and its rigorous enforcement. It

stated that the restriction is about the advertisements to the people in general. It

said that the main object and purpose of the Act is to prevent people from self

medicating with regard to serious diseases. It was argued on behalf of the

respondents that self medication in respect of diseases of serious nature

mentioned in the Act and Rules has a deleterious effect on the health of the

people. Having thus found that some medicines have tendency to induce people

to resort to self-medication by reason of elated advertisments; it was thought

necessary in the interest of public health to put a complete check. The

manufacturers are required to route their products through recognised sources so

that products of these manufacturers could be put to valid and proper test and

consideration of expert.

The Supreme Court considered the circumstances in which the legislation

was enacted and the need to curb the mischief of self-medication. It held that an

advertisement was no doubt a form of speech but its true character is reflected by

the object for the promotion of which it was employed. The Court opined that

advertisement assumed the attributes and elements of the activity under Article

19(1). But it held that “when it takes the form of the commercial advertisement

which has an element of trade or commerce, it no longer falls within the concept

234

of freedom of speech for the object is not propagation of ideas - social, political

and economic or furtherance of literature or human thought”18.

On the question of freedom of trade and business the Court opined that it

was not shown in the present case that under the guise of protecting public

interest the Act arbitrarily interferes with private business or imposes

unreasonable restrictions“).

Another point raised by the petitioner was that the words ‘ or any other

disease or condition which may be specified in rules made under the Act

surrender unguided un canalised legislative power to the executive to add any

diseases in the Schedule. The consitutionality of powers of search and seizure

provided under section 8 of the Act was also challenged by the petitioners. The

Court accepted these two arguments of the petitioners and held “a portion of

clause (d) of Section 3 and the whole of Section 8 as unconstitutional and since

these are severable from the rest of the Act, it would remain unimpaired”2°.

The Supreme Court has to deal with simiar issue in TATA Press Lrd.v

Mahanagar Telephone Nigam Ltd. 21 In this case, the issue before the court was

whether ‘commercial advertisement’ comes within the purview of the concept of

“freedom of speech and expression” guaranteed under Article l9(l)(a) of the

'8 1a., p.563.

*9 Id, p. son.

1° Id., p. S68.21 A.I.R.1995 s.c.2-438.

235

Constitution of India. Here, an objection was taken by the Nigam Ltd. against the

publication of telephone numbers of the business persons and professions on

payment in the Tata Press yellow pages as it is violation of the Telegraph Act

1885 and rules. The Supreme Court speaking on the importance of the

advertisements held the view that general society also may have a strong interest

in the free flow of commercial information”. According to the Court the

recipient of commercial speech may have deeper interest in the advertisement

than the businessman who is behind the publication. In the process Court referred

to the importance of an advertisement giving information regarding life saving

drug to the general public than to the advertiser who may be having purely a trade

consideration” .

The Court also refused to distinguish between public interested commercial

advertisements and the opposite kind. It held that “advertising, however tasteless

and excessive it sometimes may seem, is nonetheless dissemination of information

as to who is producing and selling what product, for what reasons and at what

price’"24 .

The Court, ultimately, held that “commercial speech” is a part of the

freedom of speech and expression guaranteed under Article 19(1)(a) of the

Constitution. Accordingly, the Court speaking through Kuldip Sing.J. opined that

21 14., p. 2445.

=13 1a., p. 244a.

2* 1a., p. 2445.

236

“right to freedom of speech and expression guaranteed under Article 19 (1) (a) of

the Constitution can only be restricted under Article 19(2). The right cannot be

denied by creating a monopoly in favour of the Government or any other

authority”25 .

Hence, by this judgement, the Supreme Court impliedly ovemlled

Hamdard decision and recognised the right of advertisement as part of freedom of

speech. The change in the attitude of the Court might have been due to the winds

of liberalisation blowing across the world and also India.

Provisions of the Act

The Act explicitly prohibits the publication of any advertisement referring

to any drug in terms which suggest or are calculated to lead to the use of that drug

for --­

(a) the procurement of miscarriage in women or prevention of conception

in women; or

(b) the maintenance or improvement of the capacity of human beings for

sexual pleasure; or

(c) the correction of menstrual disorder in women; or

(d) the diagnosis, cure, mitigation, treatment or prevention of any disease,

disorder or condition specified in the Schedule, or any other disease,

=5 1a., p. 244$.

237

disorder or conditions (by whatsoever name called) which may be

specified in rules under the Act. 26

In fact the above provision is the heart of the Act. There are many phrases

which needs brief explanation. The words “taking part in the publication of any

advertisement” includes the printing of any advertisement and the publication of

any advertisement outside the territories by a person residing within the territories

or at the instance of a person residing within the territory.” Hence sending the

advertisement outside India is brought within the purview of the provision.

The word ‘drug’ under this Act means more or less the same as has been

stated in the Drugs and Cosmetics Act 1940. It has been held that “machines of

science” and “electric treatment” advertised in newspapers having ability to cure

nervous diseases were considered as ‘articles’ within the meaning of section 2(b)

(iii) and therefore was considered as a ‘drug’ for the purpose of the Act.” It is to

be noted that the word “article” is used in the Act of 1954 in place of and in

addition to the word “substance” used in the Act of 1940. The Court held that

‘machines of science’ whose magically curative properties which were advertised

by the appellant were articles intended to influence the organic function of the

human bodyzg.

2° Supra n. l _. section 3.

27 Scc id. sub-section (d) of Section 2.

1* 20172» /‘llohammad v. State 0fWesl Benga,1A.l.R. 1976 s.c. 171 at p. 172.79 ,' lhrd.

238

The word ‘advertisement’ is comprehensively defined in section 2(a) of the

Act.30 It includes every form of advertising, whether in a publication, or by

display of any notice or by means of any catalogue or price list. It may be a

circular or letter or other document. It may be a label which means words

inscribed on any wrapper or article. It may be by way of sound recording, sound

broadcasting or in any other way. As the purpose of the Act is to prevent

objectionable and tmethical advertisements in order to discourage self medication

and self treatment, the Court held that the definition of advertisement’ is not too

wide.“

The words, “or any other disease or condition which may be specified in

the rules made under this Act”, according to the Supreme Court are vague. This

according to the Court, confer uncanalysed and uncontrolled power to the

executive and therefore held ultra vires.” The Court also held that by taking that

part of clause (dj of section 3 out of the Act, it will not affect the constitutionality

of the remaining part of the section or the Act.

Under the Act, the following ingredients are required to be present so as to

make a person liable:

(i) The accused should have taken part in the publication of an

advertisement;

3° Supra n. 1.

" Scc Hamdard Dawn Khana V. (mm oflndia, A.l.R 1960 S.C. 554 at p.565.

-‘2 111. at p.568.

239

(ii) that advertisement should relate to or should have reference to a

drug;

(iii) that drug is suggested as a cure for any one of the purposes

mentioned in sub clauses (a) to (d) of section 3 of the Act.

Since the contravention of the section is punishable under the Act,” courts have

construed the section strictly. This will be evident from an analysis of the few

cases decided under this Act. The Court in one case was very eloquent in making

known the objectives of the Act. In Yashpal Sahi v. Delhi /ldminis!ran‘0n34, it

stated that “the whole object of the Act is to save ignorant people from being

duped to purchase medicines just because their effect is advertised in eloquent

terms.” But in two other cases it refused to interfere. In State of Karnataka v.

R.M.K Szvasubramany Om“ and S.K. Saini v. Union of India,” the court

interpreted the section strictly. It held in the former case that to bring the act of

an accused within the mischief of law, all the ingredients of the offence will have

to be strictly proved by the prosecution.” ln the latter case, the court observed

that “if some one says that I undertake the treatment of an ailing person by

"*3 Sec supra n. 1. section 7.

3“ A.l.R. 1964 S.C. 784.

3‘ Id. at p.787

-*6 1978. cn. L.J. 853.

3‘ A.l.R. 1967. Punj. 322.

38 Supra n. 36 at . p.855

240

scientific methods with the aid of electricity, it can not amount to a suggestion for

the use of any drug.”39

From a casual reading of the section one can understand the legislative

policy behind the enactment of the provision. Sub-sections (a) and (c) of section

3 intends to protect the health of women by preventing self medication in serious

aspects of their health like miscarriages, use of contraceptives and matters relating

to menstrual disorders. This affect the health of the women in a very serious

manner. Unfortunately it is in these aspects for which most of the women hesitate

to approach the doctor and to even to disclose to their nearest relatives.

Advertisements by unscrupulous quacks come handy to such people who will be

tempted to self-medication. This reason also holds good even for the purpose

mentioned in sub-section (b) of section 3. The common weakness of the human

being in such matters is being exploited. In fact there exists no such scientific

formula which can improve the capacity of the human being for sexual pleasure.

Sub clause (d) of section 4 prohibits any adverisement suggesting the use

of any drug for diagnosis, cure, mitigation, treatment or prevention of any disease,

disorder or condition specified in the Schedule. There are 54 diseases specified in

the list“. From the perusal of the list, it is very clear that all these ailments are of

very serious nature. Therefore, the policy of the law is to discourage the people

39Supra n. 37 at p.324

4° Sec Annexurc IV for the list of diseases included in the Shedule.

241

to use the medicine on their own for treatment of such diseases. These ailments

require the people to approach recognised medical practitioners and take a better

advise before using any medicine.

As far as the use medicine for prevention, cure or treatment of any such

disease or disorder is concerned, the manufacturers can advertise the same to the

medical practitioner or to a pharmacist as per the procedure laid down in the Act

and Rules.“

The Central Government is empowered to make rules providing the manner of

advertisements relating to any drug or article.“

Rule 5 lays down the procedure to send such advertisement or documents

containing such advertisement“ Accordingly, such -documents containing

advertisements

relating to drugs shall be sent by post to registered medical practitioners by name

or to a wholesale or retail chemist. Such documents shall bear at the top, printed

‘" See Dmgs and Magic Remedies (Objectionable Advertisement) Act 1954 section 16 and Drugs and

Magic Remedies (Objectionable Advertisements) Rule, 1955. Rule 5 . Section 14 reads “Nothing in the

Act shall apply to any advertisement relating to any drug sent confidentially in the manner prescribed

under section 16 only to a registered medical practioner.

42 Id., S. 16. It reads “ The Central Government may by notification in the ofiicial Gazette. make rules

for carrying out the purposes of the Act. 2) In particular and without prejudice to the generality of the

foregoing power, such rules may Prescribe the mamier in which advertisements of article or things

referred to in clause (c) of Section l4 may be sent confidentially“.

43 Sec Drugs and Magic Remedies (Objectionable Advertisements) Rules 1 955. Rule 5 .

242

in indelible ink in a conspicuous manner, the words “for the use only of registered

medical practitioners or a hospital or a laboratory.“

Hence, the Act ideally reposes trust on the doctors so that they would

prescribe appropriate dose of the right medicine. But studies show that most

pharmaceutical advertisements directed at physicians are false or misleading and

can cause doctor to prescribe drug improperly, thus endangering patients’

health.“ It was found that virtually every medical joumal contains advertisements

that violate regulations. Astonishing disclosures were made by the studies.“ It

was found that 92 per cent of the advertisements potentially violated at least one

regulation. 38 per cent of advertisements potentially violated at least five

regulations. 50 per cent of the advertisements had little or no educational value.

59 per cent would not lead physicians to proper prescribing. 47 per cent of the

advertisements that addressed issues of side effects and contra-indications” did

not appropriately highlight the side effects.”

What makes these findings especially troubling is the fact that many

doctors rely on advertisements and handouts of pharmaceutical companies for

information about drugs. Whether they should or should not is another aspect.

‘*4 lbid.

‘S Sec Health letter, August. 1992.

"6 14.. P. r

4” 1/~11.

243

But when infomiation is false and misleading and swallowed by doctors,

patients can be harmed. This happens in spite of the prohibition by the Act.“

lt clearly provides that “no person shall take any part in the publication of

any advertisement relating to a drug if the advertisement contains any matter

which —

(a) directly or indirectly gives a false impression regarding true character

of the drug; or

(b)makes false claim for the drug; or

(c)is otherwise false or misleading in any material particular”."9

It is not necessary that there must be some evidence of mischief before

prohibiting an advertisement. It is sufficient if in the opinion of the authorities it

is likely to mislead or deceive. The tendency of a particular advertisement to

mislead is to be determined by the net impression it is likely to make upon the

public.

Unfortunately these provisions are considered to be ineffective in

controlling false or misleading advertisements. Consumer education through

advertisements remained a distant dream and mirage. To meet the growing

menace, some provisions were incorporated in the Monopolies and Restrictive

Trade Practices Act 1969 and the Consumer Protection Act 1986. Since the

48 Supra n. 1. section 4.

‘°1/la.

244

provisions in these two enactments are identical, it may be sufficient to study the

provisions in any of these Acts. These provisions are envisaged as an effective

means to combat the terrarism of unfair trade practices.

Provisions of MRTP Act dealing with advertisements

MRTP Act was enacted in 1969 with an object to prevent concentration of

economic power to the common detriment, for the control of monopolies and

restrictive trade practices and for matters connected or incidental to these. Since

the present analysis pertains to misleading advertisements, the scope of this part

of the study is confined to the aspects of unfair trade practices under MRTP Act

and their impact onipharmaceutical product advertisements.

Section 36 A of the Act defines an unfair trade practice 5° to mean a trade

practice which adopts any unfair method or deceptice practice for the purpose of

promoting the sale or supply of any goods or services. Among other things, these

unfair trade practices include the practice of making any statements whether

orally or in writing or by visible representation which (1) falsely represents that

the goods are of a particular standard, quality, grade, composition, style or model,

(2) represents that the goods or services have sponsorship, approval, performance,

characteristics, accessaries, uses or benefits which such goods or sen/ices do not

$0Consumer Protection Act 1986, sub-clause (r) of Section 2(l) also conveys the same meaning as

provided under MRTP Act 1969.. This provision was substituted by Consumer Protection (Amendment)

Act 1993.

245

have (3) makes a false or misleading representation conceming the need for, or

the usefulness of any goods or services.

Further, section 36 B has empowered the MRTP Commission to enquire

into an unfair trade practice upon receiving a complaint of facts which constitutes

such practice from any trade association or from any consumer or a registered

consumer association whether such consumer is a member of that consumer

association or not. It is also empowered to enquire into any such practice upon an

application made to it by the Director General or upon its own knowledge or

information. Section 36 D provides that the MRTP Commission may enquire into

any unfair trade practices which may come before it for enquiry, and, if after such

enquiry, it is of the opinion that practice is prejudicial to public interest or in the

interest of any consumer or consumers generally, it may pass a cease and desist

order directing that the practice shall be discontinued or shall not be repeated.

Under section 12 A of the Act, the Commission is empowered to issue

temporary injunction in the course of enquiry into any monopolistic, restrictive or

unfair trade practice, restraining the carrying on of such trade practice untill the

conclusion of such enquiry, if found prejudicial to public interest or interest of

any trader or of consumers generally. Section 12 B of the Act also empowered

the MRTP Commission to award compensation on account of any monopolistic,

restrictive or unfair trade practices, to the aggrieved person.

246

Failure to warn

In re Zandu Pharmaceutical Works Ltd.5', the manufacturer of ayurvedic

medicine, while advertising its medicine ‘Trishun’ failed to give the caution that

the medicine should be taken under the advice of a physician. Accepting that it

was an unfair trade practice, the manufacturer gave the undertaking that in all

future advertisements for sale of this product the words, “ Read the instruction on

the pack carefully before use “ would be incorporated.

Again in re Boots (“ompany Ltd.52, the respondent engaged in the

manufacture of pharmaceutical products. In its advertisements on TV network it

failed to state the warning that ‘Coldarin’ should not be used by children below

12 years of age, except under medical advise as per the requirements laid down by

the Director General of Health Services. Holding it to be an unfair trade practice,

the Commission disposed of the case on the basis of an undertaking given by the

respondent.

Unsubstantiated claims

If a company producing a drug makes an advertisement consisting of

certain claim of cure, it must be in a position to substantiate the same with the

scientific data available with them. Otherwise such claim can be called as

misleading or false claims covered by the sweep of unfair trade practices. The

" UTP Enquiry No. 164/1986. Order dated 14-6-I988.

‘2 UTP Enquiry No 401/1937, Order dated 17-11-1983.

247

basis for the orders passed by the Commission in most of the cases decided by it

appeared to be the principle enunciated in the United States in a celebrated case

Charles of the Ritz I)istribut0r Corp. v. FTC53. Facts of this case are very

interesting. In this case there was a petetion to review a cease and desist order

issued pursuant to a complaint charging the petitioner with having violated

Section 5 of the FTC Act (U.S) by falsely advertising its cosmetic preparation by

name ‘Charles of Ritz Rajuvenescence cream’. The advertisement typically

referred to ‘a vital organic ingredient’ and certain ‘essences and compounds’

which Rajuvenescence cream allegedly contained and stated that the preparation

brings to the user’s skin quickly “ the clear radiance... the petal-like quality

texture of youth” and that it “restores natural moisture necessary for a live,

healthy skin”, with the result that “your face need know no draught years” and

that it gives to the skin ”a bloom which is wonderfully rejuvenating” and is

constantly “active in keeping your skin clean, radiant and young looking“.

The Commission found that such advertising falsely represented that

Rejuvenescence cream would rejuvenate and restore youth or the appearance of

the age of the user. It, therefore, ordered petetioner to cease and desist

disseminating in commerce any advertisement of Charles of the Ritz

Rajuvenescence cream in which the word “Rejuvenescence’ or any other word or

_ _ ,4 i_ __ _ __ __; x153 (1944) Court of_ Appeal. SecondQircuit.:i43 f 2d 676:\iquoted in McCall. ('0nsumer Protections,‘('ases, _\'0!c.s' and .11aIt=rir11sT‘_We-sPlnP~tglii;”hing C0. (1997). p. I66.

248

term of similar import or meaning is used to designate, describe or refer to the

petetioner’s cosmetic preparation. FTC also ordered to desist from advertising the

product in a marmer in which it represents directly or by inference that the said

product will rejuvenate the skin of the user. Regarding the non production of

evidence of consumers actual deceit by such advertisement the Court held that it

did not make the order improper, since actual deception of the public need not be

shown in Federal Trade Commission proceedings. Representation merely having a

‘capacity to deceive’ are unlawful“.

Similarly in re Dr. Yadgir,” the respondent gave various advertisements

claiming that white patches appearing on the body of the person could be cured

by his medicine and said that the treatment was so effective that the patches start

fading from the very commencement of the treatment. According to medical

opinion obtained by the Commission such claims were false and as such

constituted unfair trade practice. The enquiry was concluded on the respondent

agreeing to modify the advertisement in future which would merely indicate the

possibility of treatment being successful.

In yet another case re Manne Quin ’s,56 the respondent and manufacturer

and seller of hair massage oil, in advertisement for promoting the sale of its

product made tall claims that it’s formulation is ‘world famous’ and has been

“‘ 1a, p.169

“S UTP Enquiry No 1/I989. Order dated 3 l-12-1990.

-“' UTP Enquiry No m7/1986. Order dated 20-7-1939,

249

introduced for the first time in India and its use prevents hair loss. It also claimed

that it contains several imported ingredients and damaged hair would come back

to life again with the use of this formulation. The Commission passed a cease and

desist order by holding that theclaim that the product is world famous because its

ingredients are the same as used worldwide and in all western countries, is

baseless in as much as the expression ‘world famous’ rightly speaking signifies

that the product is wellknown through out the world. The Commission also said

that the claim that the product has been introduced for the first time in India is not

justified in the absence of any market survey or other evidence in this regard.

With respect to the claim that hair got strength and electricity with the use of the

formulation, the Commsion held the view that it only means that live hair and not

the dead one get the strength and hence the claim that damaged hair come back to

life is again false.

Any claim of clinical superiority over the existing drugs for similar

ailments, if unsubstantiated, the Commission may hold that such claim is

misleading and therefore unfair. In re Burrough Welcome (India) -Ltd.,57 the

respondent was manufacturing and marketting a medicine under the name of

‘Ridake Paracetamol Tablets’ for clearing headaches. In the advertisements

issued by it, it was claimed that this medicine was the safest way to clear

headaches and did not have the side effects as in the case of Aspirin, which

-‘ DTP Enquiry No. 73/1986- Order dated 224-1 1-1930.

250

caused erosive gastritis with occult and overt gastro intestinal bleedings and

gastric ulcer. It was contended that it is based on an editorial which appeared in

the British Medical Journal known as ‘The Lancet’, reproduced in Deccan Herald.

Against the respondent, it was alleged that while suppressing the view expressed

in the said juornal that paracetamol adversely affected liver, attract clause (1) of

Section 36 A. It was also alleged that he is guilty of disparaging ‘Aspirin’

regarding its side effects and extolling the quality of ‘Ridake’. The Commission

held that the impugned trade practice was unfair and ordered the respondent not to

include the same in future.

At the same time the Commission in re Hamdard Wa/cf Laborat0ries,58

held that a claim about efficacy and usefulness of a product which is based on

actual research work is not an unfair trade practice. But contrary to the sequence

of decisions in all the above cases the Commission insisted the proof of injury to

restrain an otherwise unfair trade practice in re Glaxo Laboratories (P) Ltd. 59. In

this case the allegation was that Glaxo marketed a drug “phexin” manufactured

by Capsulation, showing logo of Glaxo prominently on the packing strip and

name of Capsulation written in small print , thereby giving the impression that

‘phexin’ was manufactured by Glaxo. In the course of enguiry it was brought out

that the said drug was being manufactured and packed by C apsulation on the basis

-“‘ UTP Enquiry No. 194/19x6. Order dated ll-34987.

“’ UTP Enquiry No. 22./1935. Order dated 20-to-1981.

251

of technical knowhow supplied by Glaxo and under its supervision as per its

quality control standard. The Commission therefore held that the said practice

was not unfair practice. It was also brought to the notice during the enquiry that

the price of the drug compared well with similar products manufactured and

marketed by other leading pharmaceutical manufacturers. The commission held

that the ingredient of loss of injmy being absent, eventhough the impugned

practice may fall under one or more clauses of Section 36 A of the Act, it was not

an unfair trade practice.

in re Indo-German Pharmaceut1'cals,6° the enquiry before the Commission

was relating to an advertisement about medicine named “Energy Forte”. A claim

was made that it cured many diseases including sex disorders. The Commission

held that the advertisement merely indicated that the medicine was useful for

improving vigour and vitality and there was no claim for cure of such disorder.

The Commission observed,

“It is generally known that the contents of this medicine “Energy

forte” according to the Aytuyedic system of treatment, do have

tonic value and Ayurvedic physicians freely prescribe these drugs

for curing physical and mental weakness. It is needless to say that

one’s sexual potency, by and large, will depend upon physical

health. Therefore, so far as the efficacy of the medicine, in the

60(1987) 61 Comp. cases 432 quoted in S.M.Dugar. Law 0fM0n0p01is!ic Restrictive & Unfair Trade

Practices. Wadhwa Co. Nagpur. (1997) at p.407.

252

treatment of ailments, it is generally prescribed for, is concemed,

there cannot be any misrepresentation.”6'

A more deceptive trade practice was noticed by the Commission in an

enquiry in re Iveon Laboratories. 62 In this case a company producing a particular

bottle of medicine gave a make-belief advertisemt showing on the label that the

medicine was prepared with ‘knowhow’ of a foreign company. The Commission

passed a cease and desist order with an observation that simply because the

medicine in question had been packed with the help of the machine purchased

from M/s Rommelog Switzerland, it will not enable the respondent in any way to

represent that there was an association with the foreign company in the

fonnulation. Such an assertion on the label of the medicine would definitely

mislead the consuming public into believing that there is a technical collaboration

with the Switzerland company for the manufacture of medicine, while the fact is

that the medicine has simply packed in the bottle with the help of a machine

manufactured by the foreiwgn company. There is a clear distinction between the

contents, that is, medicine and the container that is bottle. The respondent had got

nothing to do with the medicine , i.e. the contents. As such it is deliberate

misrepresentation to make the consumer get erroneous impression about the

knowhow.

6‘ 1a.. p.4os.

‘*2 UTP Enquiry No. 141/1986. Order dated 23-2-1990.

253

In some of these cases respondents deserved to be prosecuted under the

provisions of the Drugs and Magic Remedies (Obligationable Advertisement) Act

1954 and the rules framed under it. For example in re Bengal : Dawakhana,

Faridabad l)elhi,63 the respondent advertised offering medicines and treatment

with miraculous effects. Such advertisements are prohibited by the provisions of

the Drugs and Magic Remedies (Obligationable Advertisements) Act 1954 for

averting or reducing the risk of injury to the person using the medicine. As the

respondent did not comply with the standards prescribed by the competent

authority, it was held to be unfair trade practice by the Commission and on an

undertaking given by the respondent, the case was disposed under section 36 D

(2) of MRTP Act. When the Commission noticed during its enquiry that the

respondent violated the penal provisions of the Drugs and Magic Remedies

(Objectionable Advertisement) Act 1954, it ought to have reported the matter for

prosecution. Leaving the respondent on the basis of an undertaking may not be

justified in the circumstances.

These are few casess decided under MRTP Act available in India to

explain the meaning as to what constitute unfair trade practice and misleading

advertisement in this area. There are also few decisions of the U.S. Courts in this

context which have set the standards. In U.S., as in India, there are separate

regulations for advertisements of drugs sold without prescription and dings to be

6" UTP Enquiry No. 238/1938 Order dated 264-1938.

254

sold with prescription. The drugs sold without prescription are also called “over

the counter” drugs and are regulated by the Federal Trade Commission (FTC).

The drugs sold with prescription are called prescription dmgs and are regulated by

the Food and Drug Administration (FDA)64 In Thompson Medical Company, Inc.

v. Federal Traded Commissz'0n,65 a complaint was brought by F.T.C. against

Thomson Medical Company alleging that the company’s advertisement for

‘Aspercreme’, a tropical analgesic was false and misleading. The Commission

ordered Thompson to refrain ‘from making unsubstantiated claims and to disclose

in the product’s labelling and advertising that it does not contain aspirin. The

company challenged the order on the ground that it was arbitrary and not

substantiated by evidence. ‘Aspercreme’ is supposed to help arthritis victims and

others who seek relief from minor aches and pains. As the name suggests,

‘Aspercreme’ is a creme meant to be rubbed on the area where analgesic effect is

desired. Despite its name, however, ‘Aspercreme’ contains no aspirin. Rather its

active ingredient is some other chemical. But company’s advertisement of

Aspercreme strongly suggested that Aspercreme and aspirin were some how

related. The television advertisement used by the company was alleged to have

the following monologue:

“When you suffer from arthritis, imagine putting the

strong relief of aspirin right where you hurt.

64 Federal Food. Drug. and Cosmetic Act 1938. section 502(n).

°-‘ 1936-1 Trade ('ases (>2_ 6'/1.

255

Aspercreme is an adoreless rub which concentrates the

relief of aspirin. When you take regular aspirin, it

goes throughout your body like this. But, in seconds,

Aspercreme starts concentrating all the temporary

relief of two aspirin directly at the point of minor

arthritis pain... [Voice over]. Aspercreme. The

strong relief of aspirin right where you hurt.”66

According to the complainant in this and similar advertisements, theC

announcer was shown holding aspirin tablets at the beginning of her monologue

and when she spoke the aspirin was replaced by a tube of Aspercreme.

Comt refused to interfere on the finding of the FTC that the advertisement

contained misrepresentation when it claimed that something was existing which it

did not contain. The court refused to accept the assertion that Commission order

would destroy its business, and was tantamount to an order to cease selling

Aspercreme. The Court observed,

“FTC’s order did not bar the sale of Aspercreme forever and under

all circumstances. Indeed, the sale of Aspercreme was not barred at

all. Only misleading advertising was prohibited. If Thompson does

come up with new clinical studies, ...... .. it would be free to continue

to make such efficacy claims in its Aspercreme ads. In the interim,

it is free to advertise as long as it does not make false or misleading

representation .... .. “Allowing such advertisements because to stop

6° 1a., p. 62, 672.

256

would hurt the fimfs economic interest is obviously not pan of the

calculus of interests Congress intended the FTC to consider.”°7

Hence company’s petition for review of FTC’s order was denied.

In another case68, a manufacturer of a brand-name prescription drug

containing the active ingredient propranolol sent a letter to a number of

pharmacists throughout the U.S. warning them not to substitute generic version of

the drug for the brand name item, if the pharmacist did not know the reason for

the prescription. The letter also claimed that the brand-name drug was the only

one approved by the FDA for the treatment of post-myocardial infraction. This

claim was false because there were other drugs approved by FDA for the same

treatment. The court held that it was a misleading advertisement but did not

amount to anti-competitive conduct and was not deceptive as a matter of law

because the letter fairly stated that the issues discussed in it were open ones and

that the views expressed were its own. But comt answered the question whether a

commercial party has a reasonable interest to be protected against the alleged

false advertising negatively. In this case the petitioners were rival manufacturers

of similar drug. The Court held that “the plaintiffs do not have a reasonable

6" 14.. p. e2_ 676.68

The National Association of Pharmaceutical Manufacture, Inc, and Zenith Laboratories", Inc. v.

.-1_vc'rst Laboratories. 1987-1 _ Trade Cases. 60. 444.

257

interest to be protected and therefore do not have a standing to bring this

action.”69

Most common misleading claims are relating to the medicinal capacities to

reduce weight without diet. One such case was brought to the notice of F.T.C.,

where a doctor engaged in a deceptive practice in connection with sale of “Fat

Magnet” diet pills, which were falsely advertised as capable of helping the users

lose weight without diet or exercise. The judgement permanently enjoined on

Dr.Shell from making unsubstantiated claims regarding the performance, efficacy

or safety of any weight control food or, drug or device he markets to consumers.

He was also required to pay Rs. 20,000 for consumer redressm.

Provisions dealing with labelling of packages of drugs

Labelling is an advertisement as per definition of advertisement“.

Perhaps the dissemination of information aspect is taken care of by the provisions

dealing with labelling of packages of medicines. The law provides that no drug

can be SOld Without being properly labelled”. The manner of labelling is also

provided in the lawn. It is intended to ensure the publication of all the

information to ensure safety and efficacy of the dnlg when it is used by the

69 Id. at 60, 450.

'0 Reffered in S.M. Dugar. Law of .1 Ionopolistic Restrictive & Unfair Trade Practices, Wadhawa & C0..

Nagpur (Third Edition. 1997) at p. -H3.

_' See supra n. l. section 2 (a)-"1

* Druga and Cosmetics Rules 1945. Rulc 95

"-‘ 1a., Rule 96.

258

consumer. The contents to be included in labelling is clearly indicative of the

purpose in this regard.

The law insists that for certain dmgs only the ‘proper name’ of the dmg

should be printed on the label in a more conspicious manner than the trade

name”. The proper name generally means a name which is in the Indian

Pharmaceopocia or any other recognised pharmacoepocia or National Formulary

of India or any non-properietaiy name published by the World Health

Organisation. Proprietary name or trade name means words indicating a

particular manufacturer. All new drugs and drugs provided in Shedule ‘W’ must

bear only proper name and not trade name-75.

Apart from the name, the label must bear clear description of the

pharmaceutical form of the product. It should contain the list of active and non­

active ingredients and the quantities of each. The quantity of the product in a

container i.e. the net weight, or measure, except in certain special cases where a

dosage is permitted instead of the actual statement of quantity should be

expressed on the label“. It should also contain proper directions for~use and a

statement of warnings or special directions as prescribed by the product licence

and a statement about any special conditions for the safe handling or storage of

the medicine.

“‘ 1d.,Rule 96 (1) A.

14., Rule 96 (1) B.

*6 Id, Rule 96 (tn).

259

Other contents to be incorporated include the name and address of the

product licence holder and his product licence number preceded by the letters

‘PL’, a ‘batch reference’ so that the particular container can be clearly identified

as to source date and time of the manufacture. The manufacturer’s licence

number preceded by letters ‘ML’ must be printed on the imier most container”.

The date of expiry of potency prescribed by the manufacturer is to be included in

the label. If the drug is intended for distribution to the medical profession as a

free sample, it should furtherbear the words, ‘physicians sample - not to be sold’

on the container.

Container of a prescription medicine for internal use should conspicuously

display the warning that it should be sold by retail only on the prescription of a

Registered Medical Practitioner”. In the case of any ointrnents it must be labelled

with words in capital ‘for External use only’. The container of a medicine made

up for treatment of animal should be labelled conspicuously with words ‘Not for

human use; for animal treatment only ‘ and should bear a symbol depicting the

head of a domestic animal”.

Any shop keeper who sells a medicinal product which contravenes these

regulations is criminally liable. But he can show that the product was in the same

1d., Rule 96 (iv) (\') & (vi).

78 Id... Rule 97.

‘9 1a., Rule 97 0).

260

state when it was sold to him and he had no reason to believe that there was any

wrong with it. Then the proceedings could be launched against the manufacturer.

There was a move to make it a statutory requirement for insertion of

package inserts in consumer packs of medicine which was opposed by the

manufacturers of medicinego. A package insert gives information of the

description of the product, its composition, indications, contraindication, adverse

reactions, drug interaction, dosage and administration. It was opposed on the

ground that it is highly labour intensive and time consuming. In addition to this,

in a multi-lingual country like India, when major companies are selling medicines

in different parts of the cotmtry they are bound to face the language probehn if

they have to prepare package inserts by keeping every user in view. Another

basic problem would be cost of package inserts. If the manufacturers are insisted

to use package inserts for the purpose of every user of medicine, they may comply

with the requirement if they are allowed to recover the cost by including the

expenses of package inserts in the conversion costs. Therefore, ultimately it is a

cost-benefit analysis from the point of view of the consumer.

The scope of misleading information in pharmaceutical advertisement is so

broad that it is beyond the capability of authorities to correct without substantial

new ftmding for enforcement. There is an answer in the Canadian experiment to

8° See F1'n.':nc:;'11£'xpncss, April 13, 1989.

261

the drug advertising critics.“ In Canada, its pharmaceutical Adveriising

Advisory Board must approve in advance all advertisements and direct mail to

physicians and other health providers. The board is made up of representatives of

medical journals, physicians, consumer groups and pharmaceutical and

advertising industries. The Canadian FDA has an ex-officio member on the board

to ensure that the members carry out their responsibilities properly. The

pharmaceutical companies are charged a fee for each advertisement submitted for

review and so there is no cost to the Governmentgz

There is every need to create such an authority in India and confer it with

statutory status which can review and approve all prescription drug advertisement

before mailing it to physicians and pharmacists. lt must be an independent body

so that it can take impartial and balanced decisions. By reviewing prescription

drug advertisements before they get to readers, such body could keep misleading

information out of the hands of doctors and consumers and prevent false claims

causing irreversible harm to patients and their families.

The provisions of the Act and rules are commendable but in the absence of

an enforcing body there is little protection to the consumer. Many cases can be

noted in the daily newspapers and in other media in which these provisions are

grossly violated but the advertisers and the media go scot free. Most deplorable is

3' See Health letter. August 1992, p. 2.83 Ibid.

262

the fact that these advertisements appear in reputed papers with very wide

circulation and are placed by well known manufacturers. What all this means is

that protection is left to the gullible consumer to protect himself against this

menace.